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A. O. Smith Corporation (AOS), headquartered in Milwaukee, Wisconsin, manufactures and markets residential and commercial gas and electric water heaters, boilers, heat pumps, tanks, and water treatment products. With a market cap of $10 billion, the company specializes in offering innovative and energy-efficient solutions and products, which are developed and sold on a global platform. The leading global water technology company is expected to announce its fiscal fourth-quarter earnings for 2024 before the market opens on Thursday, Jan. 30.
Ahead of the event, analysts expect AOS to report a profit of $0.90 per share on a diluted basis, down 7.2% from $0.97 per share in the year-ago quarter. The company beat or matched the consensus estimates in three of the last four quarters while missing the forecast on another occasion.
For the full year, analysts expect AOS to report EPS of $3.77, down 1.1% from $3.81 in fiscal 2023. However, its EPS is expected to rise 6.9% year over year to $4.03 in fiscal 2025.
AOS stock has underperformed the S&P 500’s ($SPX) 24.4% gains over the past 52 weeks, with shares down 13.4% during this period. Similarly, it underperformed the Industrial Select Sector SPDR Fund’s (XLI) 18.4% gains over the same time frame.
AOS is underperforming due to weak segments in Rest of World and North America, affected by lower water heater and treatment product volumes in China and declining orders for water heaters. Additionally, rising expenses, particularly in material costs and employee wages, are impacting AOS’ bottom line.
On Oct. 22, AOS shares closed down marginally after reporting its Q3 results. Its EPS of $0.82 met Wall Street expectations. The company’s revenue was $902.6 million, beating Wall Street forecasts of $901.6 million. AOS expects full-year EPS to be between $3.70 and $3.85, and it expects revenue in the range of $3.8 billion to $3.9 billion.
Analysts’ consensus opinion on AOS stock is cautious, with a “Hold” rating overall. Out of 11 analysts covering the stock, two advise a “Strong Buy” rating, eight give a “Hold,” and one recommends a “Strong Sell.” AOS’ average analyst price target is $81.88, indicating a potential upside of 19.2% from the current levels.
